Preservice teachers in a science methods course were provided instruction on performance assessment, then guided through a design and implementation process of performance assessment tasks. We assessed the effect of designing and implementing a performance assessment task on preservice teachers' understanding of standards-based assessment. The findings show that these preservice teachers improved in their understanding of assessment as a formative process as well as their science content understanding of the topic addressed in their designed task. We found that preservice teachers need to experiment with performance assessment tasks in an authentic context in order to understand the full potential and value of the task.